[ralfy]

$this->bbcode_second_pass_quote('ROCKMAN', 'R')alfy - "C11 means less business because vendors and suppliers need the same businesses that are going bankrupt.". Actually just the opposite is generally true. If Company A flushes several $billion in bond debt and does so without having to liquidate any of its asserts its net revenue increases as well as its debt rating.

Even if it doesn't completely flush its bond/bank debt the " reorganization " of its debt (Chapter 11 is referred to as a "reorganization") the rates are generally reduced and the repayment period is extended. In essence the primary goal of the debt reorganization is to allow a company to expand operations in hopes of increasing revenue which would allow a greater opportunity to service its debt.

And that is done by Company A taking that increase in net revenue that can then be paid to the vendors and suppliers. IOW Chapter 11 filings will actually benefit those companies: more revenue spent on operations instead of repaying 100% of debt is good for the vendors. Also understand how vendors deal with operators with a problem dealing with their debt: the vendors require payment upfront. I've consulted for many small operators with questionable abilities to pay invoices. IOW more then once I've hand delivered a check to a vendor that then waited for it to clear the check before the followed up on their end.

As I pointed out early folks referring to the number of companies filing bankruptcy (typically Chapter 11) as the "death of the oil patch" have it 100% ass backwards. It actually allows those companies a chance to survive and potentially prosper. In my 41 years I've seen only one company liquidated. It's the bond investors that usually take the big hit: in Chapter 11 they are typically the lowest on the list of repayment priorities.

[AdamB]

$this->bbcode_second_pass_quote('ralfy', '
')The magic word is "chance," and that leads to good things only in an imaginary world where there is no POD and no connection whatsoever between the finance and oil industries.

[ROCKMAN]

Ralfy - "The magic word is "chance," and that leads to good things only in an imaginary world". I apologize bro...I assumed too much when it comes to yours and others understanding of bankruptcy. So many were running around like their hair was on fire recounting how many energy companies had filed for bankruptcy. I should have explained the real dynamic at that time.

Above all else filing bankruptcy DOES NOT mean a company is going out of business. In fact, often just the opposite. In the case of Chapter 11 bankruptcy filings it is a legal tool used by companies to keep operating. Which is the primary goal of the bankruptcy judge. He will restructure a company's debt, often times completely eliminating obligations to the unsecured investors such as bond holders. The remaining debt is "reorganized" (as I described above) to allow the company to continue operations.

Of course clearing Chapter 11 doesn't mean a company is in great financial shape. But it does mean the have a chance to rebuild and do so in the REAL WORLD and not the imaginary world you mentioned. But don't take my word on it: here are the words directly from the US govt bankruptcy court:

"This chapter {Chapter 11} of the Bankruptcy Code generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time."

Here are more details then you would ever want to know:

http://www.uscourts.gov/services-forms/ ... tcy-basics

And even in the case of a Chapter 7 bankruptcy filing

{A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 11 or 13. Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code.}

the company doesn't necessarily disappear: they may have little or no assets but they have no debt either. They can still raise money from a variety of sources if they have a good enough story to tell. I once consulted for a company that did just that: went thru Chapter 7 (burning me for $11,000 in consulting fees) and then raised tens of $millions for a variety of projects including a big one in Colombia. BTW the SEC eventually charged them with fraud involving the Colombia project. The leopard can't change his spots. LOL.

None of the above is to say the 100+ companies that filed Chapter 11 bankruptcy are in great financial shape when they clear the court. But it certainly doesn't represent the "death of the oil business" as some have tried to portray it. In the real world those companies are actually using federal bankruptcy laws to survive and continue operating. How well they do or don't reform after Chapter 11 is a different issue. But the bankruptcy court allows them to stay in the game.

All those companies filing bankruptcy is not a sign of "death" but in reality a remission of the cancer (the debt) that would have killed those companies had not the federal govt provided them with very effective "chemotherapy". LOL.

I don't mean to be rude but all those pointing to the myriad of bankruptcy filings as the "end of times" have it completely ass backwards. Certainly not a time to party for many of those companies but not a wake either.

[ralfy]

$this->bbcode_second_pass_quote('ROCKMAN', 'R')alfy - "The magic word is "chance," and that leads to good things only in an imaginary world". I apologize bro...I assumed too much when it comes to yours and others understanding of bankruptcy. So many were running around like their hair was on fire recounting how many energy companies had filed for bankruptcy. I should have explained the real dynamic at that time.

Above all else filing bankruptcy DOES NOT mean a company is going out of business. In fact, often just the opposite. In the case of Chapter 11 bankruptcy filings it is a legal tool used by companies to keep operating. Which is the primary goal of the bankruptcy judge. He will restructure a company's debt, often times completely eliminating obligations to the unsecured investors such as bond holders. The remaining debt is "reorganized" (as I described above) to allow the company to continue operations.

Of course clearing Chapter 11 doesn't mean a company is in great financial shape. But it does mean the have a chance to rebuild and do so in the REAL WORLD and not the imaginary world you mentioned. But don't take my word on it: here are the words directly from the US govt bankruptcy court:

"This chapter {Chapter 11} of the Bankruptcy Code generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time."

Here are more details then you would ever want to know:

http://www.uscourts.gov/services-forms/ ... tcy-basics

And even in the case of a Chapter 7 bankruptcy filing

{A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 11 or 13. Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code.}

the company doesn't necessarily disappear: they may have little or no assets but they have no debt either. They can still raise money from a variety of sources if they have a good enough story to tell. I once consulted for a company that did just that: went thru Chapter 7 (burning me for $11,000 in consulting fees) and then raised tens of $millions for a variety of projects including a big one in Colombia. BTW the SEC eventually charged them with fraud involving the Colombia project. The leopard can't change his spots. LOL.

None of the above is to say the 100+ companies that filed Chapter 11 bankruptcy are in great financial shape when they clear the court. But it certainly doesn't represent the "death of the oil business" as some have tried to portray it. In the real world those companies are actually using federal bankruptcy laws to survive and continue operating. How well they do or don't reform after Chapter 11 is a different issue. But the bankruptcy court allows them to stay in the game.

All those companies filing bankruptcy is not a sign of "death" but in reality a remission of the cancer (the debt) that would have killed those companies had not the federal govt provided them with very effective "chemotherapy". LOL.

I don't mean to be rude but all those pointing to the myriad of bankruptcy filings as the "end of times" have it completely ass backwards. Certainly not a time to party for many of those companies but not a wake either.

[AdamB]

$this->bbcode_second_pass_quote('', '
')The last time U.S. drillers pumped 10 million barrels of crude a day, Richard Nixon was in the White House. The first oil crisis hadn’t yet scared Americans into buying Toyotas, and fracking was an experimental technique a handful of engineers were trying, with meager success, to popularize. It was 1970, and oil sold for $1.80 a barrel. Almost five decades later, with oil hovering near $65 a barrel, daily U.S. crude output is about to hit the eight-digit mark again. It’s a significant milestone on the way to fulfilling a dream that a generation ago seemed far-fetched: By the end of the year, the U.S. may well be the world’s biggest oil producer. With that, America takes a big step toward energy independence. The U.S. crowing from the top of a hill long occupied by Saudi Arabia or Russia would scramble geopolitics.

[Tanada]

More Saudi-America nonsense. To be just oil independent the USA would have to produce double that 1970 record every day. Don't get me wrong, I would rather send my money to producers employing Americans to get the fuel I need for my lifestyle than send that money overseas to people who dislike me for that very lifestyle. But it is a far cry from setting a new domestic production record to being energy independent when we are still importing millions of barrels of oil every day while also drawing down the commercial stockpile and the SPR. Once those commercial stocks are gone and the SPR sale legislation expires we will either need to import another MM/bbl/d or produce it domestically just to maintain current levels of consumption.

[AdamB]

$this->bbcode_second_pass_quote('', ' ')
The term energy dominance has been eschewed by the US Department of Energy as the end game of the shale revolution with the resurgence of production to all time highs (oil, natural gas and NGL’s). Politicians and the media are singularly focused on when, not if US oil production will eclipse Russia (at 11.3 million bpd) and Saudi Arabia at (10.0 million bpd constrained). This viewpoint is understandable as oil is the largest hydrocarbon energy source and is fungible and easily transported. Furthermore, as we all know, production and control of oil has been one of the most important if not the most important geo-political levers throughout history, with strategic alliances and wars fought over it. So, it is understandable why the US is rightfully pleased as punch that its shale oil resources are increasingly being developed creating monthly record

[AdamB]

Interesting article, that ignores several points, and appears to obfuscate on others.

The EIA claimed to be overly optimistic isn't also mentioned as the one that was overly PESSIMISTIC previously, so based on past conservative principles, it would seem that understanding their past behavior is important, if only to explain why you conveniently avoid the point. Also, while sweet spot development is certainly of a priority to all operators in the Bakken and Eagle Ford, that isn't where the current growth is coming from, and development in the Midland and Delaware basins within the Wolf camp looks to be as substantial and prolific as either the Bakken or Eagle Ford. Or both.

Lest we forget, another CEO just this past November blasted the EIA in the press over their high estimates. Harold Hamm being that person. And those estimates of the EIA? Turned out to be low. Again, they keep getting it wrong on the LOW side.

[coffeeguyzz]

And, again, as prodigious as the oil output is, the gas production will simply blow people away.

Associated gas barely registers for most operators seeking oil.
Texas and Oklahoma production is rich in both NGLs and methane.

2018 will see Appalachian Basin numbers to write home about.

[ROCKMAN]

Define “energy producing superpower”:

1) A country that produces just enough energy to satisfy its needs
2) A country that produces enough energy to satisfy its needs and exports the surplus
3) A country that produces more then most countries but still needs to import energy to meet its needs.
4) A country that produces more than most countries but still needs to import energy to meet its needs. A country that also spent $trillions of taxes and thousands of the lives of its military unsuccessfully trying to stabilize oil exporting regions.
5) A country that produces more than most countries but still needs to import energy to meet its needs. A country that also spent $trillions of taxes and thousands of the lives of its military unsuccessfully trying to stabilize oil exporting regions. A country with politicians and “experts” trying to convince the public it will soon shift to Category 1 and perhaps even if Category 2.

[dissident]

A brainless propaganda slogan to make all the sheeple feel warm and fuzzy about how things are going.

[kublikhan]

$this->bbcode_second_pass_quote('', 'I')n December, U.S. net petroleum and petroleum product imports fell to the lowest level on record. On the current trajectory, they could fall to zero in 2020.

The overall balance between U.S. imports and exports of both crude oil and finished products fell to 2.6 million BPD in December. That is the lowest level since the EIA began tracking this category in 1973:
U.S. Net Imports of Crude Oil and Petroleum Products

Last fall the International Energy Agency declared in its World Energy Outlook 2017 that the U.S. could be a net exporter of oil within a decade. On the current trajectory, net imports could indeed turn into net exports in 2020.

[kublikhan]

US net imports of crude oil and petroleum products fell to 1.4 million bpd. 10 years ago this time of year it was 11.5 million bpd of imports.

US net imports of crude oil and petroleum products

[kublikhan]

$this->bbcode_second_pass_quote('pstarr', 'W')hat a crock of manure. The Unites States consumes 20 million barrels of oil per day. The United States produces 10 million barrels of oil per day.

20 minus 10 does not equal 1.4. Sorry for your loss kub

[ralfy]

20 Mbd for less than 5 pct of the world's population.

[AdamB]

$this->bbcode_second_pass_quote('ralfy', '2')0 Mbd for less than 5 pct of the world's population.

[kublikhan]

$this->bbcode_second_pass_quote('pstarr', 'S')ure kub, minus all the finished product we import from Trinidad Venezuala Mexico Canada and who knows where else?

[ROCKMAN]

k - Mucho thanks for all the facts. The continuing irritation is the misuse of the term "consumption". It so easily confuses folks who don't understand that much of US oil "consumption" is the oil "consumed" by our refineries with the resultant products exported to the actual foreign FINAL CONSUMERS of that rather large volume of US oil "consumption". And even though that FACT has been repeatedly explained by you and the Rockman et al some here still INTENTIONALLY use that poor terminology in their arguments.

As the famous Texas comedian Ron White has said: "You can't fix stupid."

[ralfy]

$this->bbcode_second_pass_quote('ROCKMAN', 'k') - Mucho thanks for all the facts. The continuing irritation is the misuse of the term "consumption". It so easily confuses folks who don't understand that much of US oil "consumption" is the oil "consumed" by our refineries with the resultant products exported to the actual foreign FINAL CONSUMERS of that rather large volume of US oil "consumption". And even though that FACT has been repeatedly explained by you and the Rockman et al some here still INTENTIONALLY use that poor terminology in their arguments.

As the famous Texas comedian Ron White has said: "You can't fix stupid."

[GHung]

$this->bbcode_second_pass_quote('', '[')b]Next year, the US will export more energy than it imports.

The United States, long beholden to foreign oil, is poised to become a net energy exporter starting next year.
Thanks to the shale oil and natural gas boom, the United States will export more energy than it imports in 2020 for the first time since 1953, according to a forecast published Thursday by the Energy Department's statistics division. That's two years earlier than what was previously expected.
And it won't be a one-off achievement. The United States is likely to be a net energy exporter through at least 2050, the Energy Information Administration said. .......

........ According to the scenario the EIA thinks is mostly likely to happen, the United States should become a net exporter of petroleum liquids — oil and products like gasoline — after 2020. It's a milestone that was briefly achieved late last year. For one week in November, US exports of crude oil and petroleum products exceeded imports, the EIA said. It was the first time that happened on a weekly basis since the EIA began tracking in 1991.
"US crude exports are wildly disrupting the global oil trade. And US shale continues to grow at an unbridled pace," Tran said......

....... Daily oil output to spike above 14 million barrels

Fueled by shale hotbeds like the Permian Basin of Texas, the United States surpassed Russia and Saudi Arabia in terms of monthly oil production last year. US output spiked from about 5 million barrels per day in 2008 to a record 10.9 million barrels last year, the EIA said.
The International Energy Agency said the 2 million barrel-per-day jump in US production last year was the biggest jump ever recorded by any country.
The growth is likely to continue, albeit at a more moderate pace. According to the EIA's most likely scenario, US oil production is expected to keep setting annual records through 2027, and remain greater than 14 million barrels per day through 2040. .....

....... Climate impact

Still, America's energy boom has profound implications for the economy, national security and, of course, the environment.
Last week, a report by Oil Change International warned that new US oil and gas development could unleash the same amount of carbon pollution as nearly 1,000 coal-fired power plants.
The group called it a "climate catastrophe" at precisely the worst time. .......